May 2, 2017
Today’s show is a little different from my ongoing series of
conversations with Capital Allocators. As you probably know,
about 9½ years ago I made a bet with a certain Oracle, in Omaha,
that pitted the performance of a group of five hedge fund of funds
against the S&P 500.
In this year’s annual letter to Berkshire Hathaway shareholders,
Warren wrote extensively about his views. You can find that letter
at www.berkshirehathway.com/letters.
Now I haven’t said a lot about the bet, although fairly often I’m
asked how it came about, why I made the bet, what I really think
about hedge funds and the market, and of course, who's winning.
I thought long and hard about whether to share my views publicly,
and had been leaning towards staying out of the limelight.
But my guest on Episode 2 of this podcast, André Perold, convinced
me that I should share the many other investment lessons the public
can learn from this exercise.
I thought a podcast would be a perfect venue to discuss my
thoughts, so I asked my friend Patrick O’Shaughnessy to discuss the
bet with me, and that conversation follows.
Before we dive in, I thought it might help to let you know where to
find answers to some of those common questions I’m asked.
For starters, Carol Loomis, the legendary and recently retired
Fortune columnist, wrote a wonderful piece called “Buffett’s Big
Bet” back in 2008 that described in detail how the bet came to
pass. You can find her piece at www.capitalallocatorspodcast.com/bet.
On that same page, you can find links to some of my written
thoughts – both at the time of the bet’s inception and two years
ago. Next week, I’ll add another link with some concluding
thoughts.
For more episodes go to CapitalAllocatorsPodcast.com/Podcast
Follow Ted on twitter at @tseides